Yahoo Finance British graduates warned of ‘white-collar recession’
Young people trying to find an internship are facing the toughest market in at least seven years, as high interest rates hammer the jobs market.
Figures from recruitment site Indeed show that the number of internships relative to job openings has fallen sharply in recent months and is trending lower than in any year since at least 2018.
At the start of the year there were around 4,000 internships advertised per million jobs, but this figure has now more than halved.
While the number of internships typically rises around the turn of the year and falls towards summer, the dip in 2024 is on course to be deeper than in previous years.
It comes amid a wider slowdown in the jobs market as high borrowing costs and wage pressures force many employers to slow or freeze hiring.
Separate figures from Indeed showed job adverts falling below their pre-pandemic level for the first time since the economy reopened in 2021.
It means the post-Covid hiring boom has run out of steam, with available jobs concentrated in lower-paying sectors like retail, hospitality and care.
However British graduates are not alone in struggling to find internships.
In the US figures from jobs platform Handshake recently showed many white-collar sectors had registered large drops in advertised internships.
Professional services were down 16pc in the year to May, tech 14pc and financial services 13pc.
These drops have occurred even as the US jobs market has held up stronger than in the UK.
Jack Kennedy, Indeed economist, said that while hiring in the UK remains robust for many lower-paid in-person roles, higher-paid sectors are experiencing a more pronounced slowdown.
Mr Kennedy said: “We have heard quite a lot about a kind of white-collar recession.
“I think certainly our sectoral job posting data would largely corroborate that.”
Hiring for software development roles remains 36pc lower than before the pandemic in the UK, underlining how tough the market is even for those looking for full-time roles.
Large accountancy firms are also seeking to reduce headcount after taking on lots of people post-Covid, with both KPMG and PwC recently completing several rounds of redundancies.
Students and graduates squeezed by the cost of living crisis may also be more tempted to take jobs in bars, restaurants or retail, where wages have risen significantly and hiring remains strong.
A survey of 10,000 students by the Higher Education Policy Institute earlier this year found a record 56pc of students were employed.
Experts at the time attributed it to lower maintenance loans and rising rents, amid strong demand for staff in lower-paid sectors.
